The Working Class Pays the Price. Why?

Adel Samara

· Why does the working class, the producers, pay the price for crises caused by bourgeois?

Analyzing the era from the Marxist political economy perspective is inadequate if not based on the basic challenge of Marxism, that the philosopher’s mission is not to interpret the world, but to change it. Following the collapse of the “Socialist Block” many ex-socialists gave up the revolutionary spirit, but when the financial/economic crisis of 2008 occurred some of them recovered their Marxist beliefs, though in a shy manner. Even in the absence of any crisis in the capitalist countries, our role, and even the justification of our existence as socialists, is to analyze and criticize the capitalist system from a standpoint of destroying it. It is not sufficient to analyze and abstractly deconstruct the capitalist mode of production, because the deconstruction will remain neutral if it lacks the class perspective, political consciousness, and the increase level of conflict with the bourgeois to assure continuity of struggle. Socialism, as the negation of capitalism, must be established deliberately over capitalism’s ruins. Any radical analysis of the current capitalist crisis, if not devoted to pave the way for the humanity and vanguard of the popular classes to destroy the capitalist mode of production, will provide an indirect and free advice or prescription for capitalism to benefit from the Marxist analysis.

The resolutions of G8, Semi-Great, the 12, especially the last meeting in Toronto, were political more than economic, e.g.: every state must decrease its deficit by fifty percent in three years and apply tough policies of austerity and impose more taxes, every state has to choose the proper way and appropriate means of applying the resolutions…etc.

This means that it is still an economic world order rather than a political one, and that the national state still grasps the lead in spite of the economic globalisation. Every leader of the 20 represented the interests of the bourgeoisie class of his nation.

Although the bourgeoisie media repeatedly described the crisis as financial, it is in fact deeper than that. It is an outcome of human behavior. A class which controls and manages the financial institutions, exploits labor of the working class as the producer of value which crystallizes in commodities, pay lower wages, impose heavy taxes, and avoid imposing rules and regulations of the economy especially in the field of banks lending.

G8, G20 Summit

The US still adopts the bailout policy and borrows from China; European leaders argue that governments must cut their budgets in order to restore confidence. But in both cases, banks, even in the US which supported her banks with more than a trillion dollar, decided since the beginning of the crisis to minimize lending even between each other. While the crisis hits Europe today, banks did not lend, corporations continue lay off, no new jobs are created and the citizens minimize their consumption trying to repay as much as possible. The EU governments turned to extract taxes from the public!

This economic situation lacks the necessary conditions needed to face a crisis because to do so you need a strong economy to minimize the deficit. In this case money liquidity is necessary. People must have jobs to consume and repay debts and this is not the case. What is going on is the opposite! The capitalist regimes impose even heavier taxes to collect the money liquidity needed.

This is the main difference between the US and Europe now. The US has been supported by borrowing from China; the Chinese surplus is guaranteed by US budget bonds. The US uses the borrowed money to buy products of China. The relationship between the US and China is bourgeoisie class cooperation, which mainly affects the Chinese working class on the one hand and the popular classes in the US on the other. Many US corporations transfer their businesses to China looking for lower wages to keep the rate of profit high through two means:

· We must note that Obama asked the 20 leaders to stop depending on the US market as the last resort. This might be because the US is mainly interested in buying the US commodities produced by the US companies in China.

· The strengthening of US/China trade might be the reason why China did not provide loans to Europe. In addition to lending the US, China is keen to invest in Africa.

From economic point view the world is divided into four blocks, three of them attended the Toronto summit, while the fourth has never been considered or invited, those blocks are:

1. The so called growing Asian economies; this description is vague in two ways

a. Not all Asian economies achieved growth

b. Even those who register growth, e.g. China and India, suffer deepening social imbalances due to the harsh exploitation of the working classes.

2. The US economy registers a weak and slow growth which is not guaranteed.

3. The European block economy which is currently affected by the crisis

4. And the forth block which is the rest of the world nations which are poor and always suffer from a crisis.

The contradiction between the four blocks obstruct regimes consensus on decisions or resolutions to face the crisis. This might be one of the reasons why the summit never produces substantial economic resolutions. A reading of what is behind the resolutions, what are between lines, shows that there are two declarations of wars:

· First the war against popular classes all over the world through austerity programs, banks free choice to provide loans, corporations’ lays off and finally the continuous price hikes especially for basic needs.

· The consensus on tightening pressure on Iran and North Korea as a preparation for war.

In the Service of One Class!

Banks are not an invisible hand which comes down from sky to manage crises and solve problems on earth and then return peacefully; but they are rather places, or ever, hills of money. Still this is not the real situation, it is only an abstract. Banks in reality are owned and managed by human beings, owners and managers, who exploit people while selling and buying. In the end money accumulates money! Even during the crisis they aim to accumulate money, and will do that forever. They will keep aiming at reaching unlimited rate of profit.

Banking elite interests are deeply connected with other bourgeois social elites in the capitalist system, the industrial capitalism, the administrative/ruling political elite, the military industrial complex and that of media. Call them social classes or elites, they are ruling in the center and even the periphery in several indirect manners and mechanisms. This form of tight and material relationship between these elites is the reason why the regimes did not, until the moment, decide to touch the principles of neo-liberalism economic policies. It is so clear that de-regulation let banks lend money to people who are unable to repay considering the fact that wages in the US in particular have been deteriorating for the last decade. This is due to the fact that corporations either down-size or migrate to countries of low wages. The other four elites were protecting by the financial one which is one of them.

The reason behind providing sub-prime loans as an adventure was motivated by searching for outlets to circulate the highly accumulated Lazy Capital. Capital is not lazy in nature, but when there are no outlets it became idle. That is why capitalists must find places/areas for investment in mortgages and/or wars. War is a capitalist industry! If the calculations of direct imperialist war, against Iraq and Afghanistan, were wrong, imperialists push many dependent classes, ethnicities in the periphery to launch civil wars and/or wars between countries to consume weapons, i.e. imperialism industrializes wars.

The world markets witnessed a sharp increase of food prices three years before the economic/financial crisis, but despite that fact, prices of all commodities never declined. This is due to the capitalists of the centre’s tight control over markets and their policies to substitute the decrease of consumption by maintaining prices hike as mechanism to maintain high rate of profit.

Ironically, the price of oil is most arguable one, while the rest of vital and costly commodities which are mainly produced in the centre are never challenged by that argument, protest and even conspiracy. On the one hand this contradicts the primitive crystallization of a globalized class, on the other it proves that there are deep contradictions inside the same semi-class, especially because the oil countries control a commodity that is available in a rental manner and they are not main components of the globalized highly advanced industrial/capitalist class. The issue of oil refers to the fact that center still internally cohesive when it comes to the centre/periphery relationship.

Who Will Pay?

Although the first symptoms of the crisis started at the financial level and were caused by the same financial institutions which lend sub prime loans, it went deeper into real economy. Its manifestations are increased unemployment, layouts, downsizing, and tough banks lending conditions. But the most painful decision by the ruling classes is still the remedy by adopting austerity that reduces public spending and imposes higher taxes over the popular classes. These measures are always analyzed by an abstract discourse. For instance, if the government minimizes expenditures consumption will decline and loans repayment will deteriorate, and if government increases spending inflation will rise and it will harm exports even if the government decides to reduce exchange rate of its currency’s exchange…etc. These abstract economic analyses are used to hide the painful reality of deteriorating living conditions and exploitation of the popular classes which is the last resort for capitalism to manage the crisis.

Why is it possible for the system to take this tough decision? It is because the working class movement is weak enough and the revolutionary movement still in decline.

War is another Alternative

One of the main components of globalism is the replacement of the Cold War by a hot one, i.e. from the Cold War between the super-powers to a hot war against the periphery. The US ruling class is the leading power for the new wars considering the fact that its industrial share in the world had declined from more than 40 percent in the 1960s to nearly 19 percent today, but it is still the most powerful military power and weapons production. It is of the interest of the industrial military complex in the US to launch direct and indirect wars as a vital business for its economy.

War for capitalism is leverage to the economy through destruction and re-construction, control of the wealth of the poor nations, achievement of social consensus behind the regime (Support the Troops: the way how the US regime recruit masses to support its imperialist aggressions all over the globe), and at the same time absorption of internal social tension especially those which are caused by austerity measures.

The intensive media campaign against Iran and to a certain extent against North Korea are indications that the US and the EU are building a military coalition to launch wars. This campaign tries to proof that Iran is a direct danger for the world “peace” as a manipulation to prepare world public opinion to accept war against Iran. Until now there are no hints that a popular movement against war is on the process to confront the bourgeois calls for war, nor a social movement strong enough to challenge the austerity measures. This gives the ruling classes in the west and the Zionist Ashkenazi Regime a chance to accelerate their preparation for a war especially against Iran.

While challenging war mongers must be the job of a worldwide human movement, it must start first and foremost in the countries of the capitalist centre. This must be on the top of the agendas of Civil Society in the center which is in fact not there yet! Although we witnessed a few demonstrations against war and globalism in the last few years, although it is a good popular activity separating itself from the bourgeois crimes against humanity, but it still lags behind what is really needed. Civil Society organizations, socialist, communist, leftist parties and women activists in the west must show more resistance to the two forms of wars launched by the bourgeois, the economic war at the domestic level and the colonial war at the international level.

Finally, as long as the bourgeois in the center do not give up neo-liberal policies and de-regulation on the one hand, and keep imposing higher taxes on the popular classes on the other, it means that capitalism is still in strong enough to solve the crisis it caused at the cost of the working class which is still unorganized and unable to make a revolutionary challenge to the system as the sole and final alternative to the capitalism.


* Many thanks to Barada Yousef for her assistance in editing this article.